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Summary

Understand what accounting is all about and its evolving role in business with Warren and Reeve's FINANCIAL AND MANAGERIAL ACCOUNTING, the most successful higher education accounting text of all time. You'll use the preparation of financial statements as a framemark work for understand accounting and concepts and in the rocess you'll see how to use accounting to understand business.

Table of Contents

Introduction to Accounting and Business

1

(49)

Nature of Business and Accounting

2

(8)

Types of Businesses

3

(1)

Types of Business Organizations

3

(1)

Business Stakeholders

4

(1)

Role of Ethics in Business

4

(3)

The Role of Accounting in Business

7

(1)

Profession of Accounting

8

(2)

Generally Accepted Accounting Principles

10

(2)

Business Entity Concept

11

(1)

The Cost Concept

11

(1)

The Accounting Equation

12

(1)

Business Transactions and the Accounting Equation

12

(6)

Financial Statements

18

(32)

Income Statement

20

(1)

Retained Earnings Statement

20

(1)

Balance Sheet

21

(1)

Statement of Cash Flows

22

(2)

Interrelationships Among Financial Statements

24

(26)

Analyzing Transactions

50

(55)

Using Accounts to Record Transactions

51

(9)

Chart of Accounts

53

(1)

Analyzing and Summarizing Transactions in Accounts

53

(6)

Normal Balances of Accounts

59

(1)

Double-Entry Accounting System

60

(1)

Posting Journal Entries to Accounts

61

(13)

Trial Balance

74

(1)

Discovery and Corrections of Errors

75

(30)

Discovery of Errors

75

(1)

Correction of Errors

76

(29)

The Adjusting Process

105

(41)

Nature of the Adjusting Process

106

(3)

The Adjusting Process

107

(1)

Types of Accounts Requiring Adjustment

107

(2)

Recording Adjusting Entries

109

(9)

Prepaid Expenses

110

(3)

Unearned Revenues

113

(1)

Accrued Revenues

114

(1)

Accrued Expenses

115

(2)

Depreciation Expense

117

(1)

Summary of Adjustment Process

118

(4)

Adjusted Trial Balance

122

(24)

Completing the Accounting Cycle

146

(65)

Flow of Accounting Information

147

(2)

Financial Statements

149

(4)

Income Statement

149

(1)

Retained Earnings Statement

149

(3)

Balance Sheet

152

(1)

Closing Entries

153

(8)

Journalizing and Posting Closing Entries

155

(2)

Post-Closing Trial Balance

157

(4)

Accounting Cycle

161

(2)

Illustration of the Accounting Cycle

163

(13)

Step 1. Analyzing and Recording Transactions in the Journal

164

(2)

Step 2. Posting Transactions to the Ledger

166

(1)

Step 3. Preparing an Unadjusted Trial Balance

166

(1)

Step 4. Assembling and Analyzing Adjustment Data

166

(1)

Step 5. Preparing an Optional End-of-Period Spreadsheet (Work Sheet)

167

(1)

Step 6. Journalizing and Posting Adjusting Entries

167

(1)

Step 7. Preparing an Adjusted Trial Balance

168

(1)

Step 8. Preparing the Financial Statements

168

(2)

Step 9. Journalizing and Posting Closing Entries

170

(1)

Step 10. Preparing a Post-Closing Trial Balance

170

(6)

Fiscal Year

176

(1)

Appendix: End-of-Period Spreadsheet (Work Sheet)

177

(30)

Unadjusted Trial Balance Columns

177

(1)

Adjustments Columns

177

(2)

Adjusted Trial Balance Columns

179

(1)

Income Statement and Balance Sheet Columns

180

(27)

Comprehensive Problem 1

207

(4)

Practice Set: Ralph's Painting

Accounting for Merchandising Businesses

211

(56)

Nature of Merchandising Businesses

212

(2)

Financial Statements for a Merchandising Business

214

(5)

Multiple-Step Income Statement

214

(3)

Single-Step Income Statement

217

(1)

Retained Earnings Statement

217

(1)

Balance Sheet

217

(2)

Merchandising Transactions

219

(13)

Chart of Accounts for a Merchandising Business

219

(1)

Sales Transactions

220

(5)

Purchase Transactions

225

(2)

Transportation Costs, Sales Taxes, and Trade Discounts

227

(3)

Dual Nature of Merchandise Transactions

230

(2)

The Adjusting and Closing Process

232

(2)

Adjusting Entry for Inventory Shrinkage

232

(1)

Closing Entries

233

(1)

Financial Analysis and Interpretation

234

(1)

Appendix: The Periodic Inventory System

235

(26)

Cost of Merchandise Sold Using the Periodic Inventory System

235

(1)

Chart of Accounts Under the Periodic Inventory System

235

(1)

Recording Merchandise Transactions Under the Periodic Inventory System